How Palatine plans to be debt-free in three years

Years of belt-tightening measures are paying off for Palatine, village officials say.

The village council Monday approved a plan outlined by Village Manager Reid Ottesen that's intended to make the village debt-free by 2026.

The measures, Ottesen said, will provide property tax relief, boost pension payments and reduce the village's interest costs.

"This is really changing the future of where the village can go," he added.

The plan allocates nearly $12 million in reserve funds to make remaining payments on the bonds, saving the village $1 million in interest payments.

In addition, the plan frees up $4 million in cash that the council could apply to property tax relief.

"This is one where we can all take a victory lap," Palatine Mayor Jim Schwantz said.

It seemed like an unlikely outcome in 2010, when the village was carrying nearly $120 million in debt.

But Ottesen and Finance Director Paul Mehring committed to shifting to a pay-as-you-go policy for financing village projects.

Schwantz noted that $69 million in projects have been completed without taking on additional debt, including village hall renovations and construction of a new police headquarters, as well as record spending on streets and water mains.

The policy approved Monday includes setting aside $2.5 million for an economic stabilization fund and boosting police and fire pension payments by $3 million over the $6 million planned over the next five years.

"We've been making payments to the pension funds, so we don't leave an unfunded burden there," council member Scott Lamerand said.